CRYSTAL LAKE – McHenry County College trustees remain at odds over whether they will increase taxes as they head into the final month of budget planning.
In a decision that could potentially cost the college about $675,000 depending on new growth, trustees are split on whether they should maximize revenue potential with unstable state funding and economic situations or give homeowners a reprieve after approving a 9.9 percent levy increase last year.
Bob Tenuta, the college’s chief financial officer, said levying the maximum and capturing new growth is the only way to try to keep pace with inflation. The 1.7 percent increase built into the tax cap accounts for last year’s inflation but not the coming months.
Passing on the new growth also would mean the college would never recuperate that money.
“The reality is prices have already increased 1.7 percent. That’s a year ago,” he said. “Inflation could be 3 [percent] or 4 percent this year and my utilities could go up ... it’s still a deficit.”
Trustee Molly Walsh said they are asking the wrong question in looking for how much the college can receive and instead should ask how much the college needs. She said it is not fair to ask homeowners to continue paying more when property values are on the decline.
“How can you explain to people their property taxes are going up when their home values are going down?” Walsh asked. “We are fiscally able to have a flat levy this year without jeopardizing our ability to run this college.”
Trustee Linda Liddell countered and said the college’s portion of property-tax bills is so small that it would do far more damage at an institutional level to pass up new revenue. She said local elementary and high school districts pull in far more tax revenue, and failing to capture each potential dollar also would hurt the college’s federal and state funding.
Liddell pointed out that the college is able to receive large grants because of some of the matching power the college has, which could be lost if the levy is frozen.
“Our percentage is so small every time I look at it I say, ‘Oh, I should make a donation,’” Liddell said of the college’s share of property-tax bills. “I don’t want to hamper our advancement as an institution.”
Budget projections under both scenarios showed that the college would generate about $24.2 million in the education fund with a 4.5 percent levy request compared with $23.6 million with no increase. The first scenario would create a fund balance of $14 million in the education account, while the second option would leave a $13.4 million balance.
While a final levy decision will not be made until December, the board could approve a preliminary budget at its Aug. 22 meeting. The shift toward freezing or increasing the levy could come down to board Chairman Ron Parrish, who remained on the fence.
“At this point where I’m sitting with this, as a taxpayer and property owner, I’d like to see it go down,” Parrish said. “On the other hand I really have to reserve my decision until Bob presents us with that budget [Aug. 22].”